SEC. 109.
 Exempt Transactions. – not fall within this classification and shall therefore be
(1) Subject to the provisions of Subsection (2) hereof,
the following transactions shall be exempt from the
value-added tax.
(A) Sale or importation of agricultural and marine food
products in their original state, livestock and poultry of
or king generally used as, or yielding or producing foods
for human consumption; and breeding stock and genetic
materials therefor.
Products classified under this paragraph shall be
considered in their original state even if they have
undergone the simple processes of preparation or
preservation for the market, such as freezing, drying,
salting, broiling, roasting, smoking or stripping. Polished
and/or husked rice, corn grits, raw cane sugar and
molasses, ordinary salt and copra shall be considered in
their original state; [94]
(B) Sale or importation of fertilizers; seeds, seedlings
and fingerlings; fish, prawn, livestock and poultry feeds,
including ingredients, whether locally produced or
imported, used in the manufacture of finished feeds
(except specialty feeds for race horses, fighting cocks,
aquarium fish, zoo animals and other animals generally
considered as pets);
(C) Importation of personal and household effects
belonging to the residents of the Philippines returning
from abroad and nonresident citizens coming to resettle
in the Philippines: Provided, That such goods are exempt
from customs duties under the Tariff and Customs Code
of the Philippines;
(D) Importation of professional instruments and
implements, tools of trade, occupation or
employment, [95] wearing apparel, domestic animals, and
personal and household effects belonging to persons
coming to settle in the Philippines or Filipinos or their
families and descendants who are now residents or
citizens of other countries, such parties hereinafter
referred to as overseas Filipinos, in quantities and of the
class suitable to the profession, rank or position of the
persons importing said items, [95] for their own use and
not for barter or sale, accompanying such persons, or
arriving within a reasonable time: [96] Provided, That the
Bureau of Customs may, upon the production of
satisfactory evidence that such persons are actually
coming to settle in the Philippines and the goods are
brought from their former place of abode, exempt such
goods from payment of duties and taxes:[97] Provided,
further, That the vehicles, vessels, aircrafts, machineries
and other similar goods for use in manufacture,[97] shall
subject to duties, taxes and other charges;
(E) Services subject to percentage tax under Title V;
(F) Services by agricultural contract growers and milling
for others of palay into rice, corn into grits and sugar
cane into raw sugar;
(G) Medical, dental, hospital and veterinary services
except those rendered by professionals;
(H) Educational services rendered by private educational
institutions, duly accredited by the Department of
Education (DepED), the Commission on Higher
Education (CHED), the Technical Education and Skills
Development Authority (TESDA) and those rendered by
government educational institutions; [55]
(I) Services rendered by individuals pursuant to an
employer-employee relationship;
(J) Services rendered by regional or area headquarters
established in the Philippines by multinational
corporations which act as supervisory, communications
and coordinating centers for their affiliates, subsidiaries
or branches in the Asia-Pacific Region and do not earn
or derive income from the Philippines;
(K) Transactions which are exempt under international
agreements to which the Philippines is a signatory or
under special laws, except those under Presidential
Decree No. 529; [55]
(L) Sales by agricultural cooperatives duly registered
with the Cooperative Development Authority to their
members as well as sale of their produce, whether in its
original state or processed form, to non-members; their
importation of direct farm inputs, machineries and
equipment, including spare parts thereof, to be used
directly and exclusively in the production and/or
processing of their produce;
(M) Gross receipts from lending activities by credit or
multi-purpose cooperatives duly registered with the
Cooperative Development Authority;
(N) Sales by non-agricultural, non- electric and non-
credit cooperatives duly registered with the Cooperative
Development Authority: Provided, That the share capital
contribution of each member does not exceed Fifteen
thousand pesos (P15,000) and regardless of the
aggregate capital and net surplus ratably distributed
among the members;
(O) Export sales by persons who are not VAT-
registered;
(P) Sale of real properties not primarily held for sale to
customers or held for lease in the ordinary course of
trade or business or real property utilized for low-cost
and socialized housing as defined by Republic Act No.
7279, otherwise known as the Urban Development and
Housing Act of 1992, and other related laws, residential
lot valued at One million pesos (P1,500,000) and below,
house and lot, and other residential dwellings valued at
Two million five hundred thousand pesos (P2,500,000)
and below: Provided, That beginning January 1, 2021,
the VAT exemption shall only apply to sale of real
properties not primarily held for sale to customers or
held for lease in the ordinary course of trade or business,
sale of real property utilized for socialized housing as
defined by Republic Act No. 7279, sale of house and lot,
and other residential dwellings with the selling price of
not more than Two million pesos (P2,000,000):
[95]
 Provided, further, That every three (3) years
thereafter, the amount herein stated shall be adjusted to
its present value using the Consumer Price Index, as
published by the Philippine Statistics Authority
(PSA); [98] [99]
(Q) Lease of a residential unit with a monthly rental not
exceeding Fifteen thousand pesos (₱15,000); [100]
(R) Sale, importation, printing or publication of books,
and any newspaper, magazine, journal, review bulletin,
or any such educational reading material covered by the
UNESCO Agreement on the Importation of Educational,
Scientific and Cultural Materials, including the digital or
electronic format thereof: Provided, That the materials
enumerated herein are not devoted principally to the
publication of paid advertisements;
(S) Transport of passengers by international carriers;[95]
(T) Sale, importation or lease of passenger or cargo
vessels and aircraft, including engine, equipment and
spare parts thereof for domestic or international transport
operations;
(U) Importation of fuel, goods and supplies by persons
engaged in international shipping or air transport
operations: Provided, That the fuel, goods, and supplies
shall be used for international shipping or air transport
operations; [95]
(V) Services of bank, non-bank financial intermediaries
performing quasi-banking functions, and other non-bank
financial intermediaries;
(W) Sale or lease of goods and services to senior citizens
and persons with disability, as provided under Republic
Act Nos. 9994 (Expanded Senior Citizens Act of 2010)
and 10754 (An Act Expanding the Benefits and
Privileges of Persons With Disability), respectively; [95]
(X) Transfer of property pursuant to Section 40(C)(2) of
the NIRC, as amended; [95]
(Y) Associations dues, membership fees, and other
assessments and charges collected by homeowners’
associations and condominium corporations; [95]
(Z) Sale of gold to the Banko Sentral ng Pilipinas (BSP);
[101]
(AA) Sale of or importation of prescription drugs and
medicines for: [102]
(i) Diabetes, high cholesterol, and hypertension
beginning January 1, 2020; and [103]
(ii) Cancer, mental illness, tuberculosis, and kidney
diseases beginning January 1, 2021. [104]
Provided, That the DOH shall issue a list of approved
drugs and medicines for this purpose within sixty (60)
days from the effectivity of this Act; and [105]
(BB) Sale or importation of the following beginning
January 1, 2021 to December 31, 2023: [106]
(i) Capital equipment, its spare parts and raw materials,
necessary for the production of personal protective
equipment components such as coveralls, gown, surgical
cap, surgical mask, N-95 mask, scrub suits, goggles and
face shield, double or surgical gloves, dedicated shoes,
and shoe covers, for COVID-19 prevention; and [106]
(ii) All drugs, vaccines and medical devices specifically
prescribed and directly used for the treatment of
COVID-19; and [106]
(iii) Drugs for the treatment of COVID-19 approved by
the Food and Drug Administration (FDA) for use in
clinical trials, including raw materials directly necessary
for the production of such drugs: Provided, That the
Department of Trade and Industry (DTI) shall certify
that such equipment, spare parts or raw materials for
importation are not locally available or insufficient in
quantity, or not in accordance with the quality or
specification required: Provided, further, That for item
(ii), within sixty (60) days from the effectivity of this
Act, and every three (3) months thereafter, the
Department of Health (DOH) shall issue a list of
prescription drugs and medical devices covered by this
provision: Provided, finally, That the exemption claimed
under this subsection shall be subject to post audit by the
Bureau of Internal Revenue or the Bureau of Customs as
may be applicable. [106]

(CC) Sale or lease of goods or properties or the

performance of services other than the transactions
mentioned in the preceding paragraphs, the gross annual
sales and/or receipts do not exceed the amount of Three
million pesos (P3,000,000.00). 
SEC. 106. Value-Added Tax on Sale of Goods or
Properties. -
(2) The following sales by VAT-registered persons shall
be subject to zero percent (0%) rate:[85]
(a) Export Sales. [86]- The term “export sales” means:
(1) The sale and actual shipment of goods from the
Philippines to a foreign country, irrespective of any
shipping arrangement that may be agreed upon which
may influence or determine the transfer of ownership of
the goods so exported and paid for in acceptable foreign
currency or its equivalent in goods or services, and
accounted for in accordance with the rules and
regulations of the Bangko Sentral ng Pilipinas (BSP);
(2) Sale and delivery of goods to:
(i) Registered enterprises within a separate
customs territory as provided under special laws;
and
(ii) Registered enterprises within tourism
enterprises zones as declared by the Tourism
Infrastructure and Enterprise Zone Authority
(TIEZA)
(3) Sale of raw materials or packaging materials to a
nonresident buyer for delivery to a resident local export-
oriented enterprise to be used in manufacturing,
processing, packing or repacking in the Philippines of
the said buyer's goods and paid for in acceptable foreign
currency and accounted for in accordance with the rules
and regulations of the Bangko Sentral ng Pilipinas
(BSP);
(4) Sale of raw materials or packaging materials to
export-oriented enterprise whose export sales exceed
seventy percent (70%) of total annual production;
(5) Those considered export sales under Executive Order
NO. 226, otherwise known as the “Omnibus Investment
Code of 1987”, and other special laws; and
(6) The sale of goods, supplies, equipment and fuel to
persons engaged in international shipping or
international air transport operations: Provided, That the
goods, supplies, equipment and fuel shall be used for
international shipping or air transport operations. [4]
Provided, that subparagraphs (3), (4), and (5) hereof
shall be subject to the twelve percent (12%) value-
added tax and no longer be considered export sales
subject to zero percent (0%) VAT rate upon satisfaction
of the following conditions:
(1) The successful establishment and
implementation of an enhanced VAT refund
system that grants refunds of creditable input tax
within ninety (90) days from the filing of the
VAT refund application with the
Bureau: Provided, That, to determine the
effectivity of item no. 1, all applications filed
from January 1, 2018 shall be processed and
must be decided within ninety (90) days from
the filing of the VAT refund application; and
(2) All pending VAT refund claims as of
December 21, 2017 shall be fully paid in cash by
December 31, 2019.
Provided, That the Department of Finance shall establish
a VAT refund center in the Bureau of Internal
Revenue(BIR) and in the Bureau of Customs(BOC) that
will handle the processing and granting of cash refunds
of creditable input tax.
An amount equivalent to five percent (5%) of the total
VAT collection of the BIR and the BOC from the
immediately preceding year shall be automatically
appropriated annually and shall be treated as a special
account in the General Fund or as trust receipts for the
purpose of funding claims for VAT refund: Provided,
That any unused fund, at the end of the year shall revert
to the General Fund.
Provided, further, That the BIR and the BOC shall be
required to submit to the Congressional Oversight
Committee on the Comprehensive Tax Reform Program
(COCCTRP) a quarterly report of all pending claims for
refund and any unused fund.[88]
(b) Sales to persons or entities whose exemption
under special laws or international agreements to
which the Philippines is a signatory effectively
subjects such sales to zero rate. [4]
(c) Sales to offshore gaming licensees subject to
gaming tax under Section 125-A of this Code.[20]
SEC. 106.  (B) Transactions Deemed Sale.
- The following transactions shall be deemed sale:
(1) Transfer, use or consumption not in the course of
business of goods or properties originally intended for
sale or for use in the course of business;
(2) Distribution or transfer to:

(a) Shareholders or investors as share in the profits of the

VAT-registered persons; or

(b) Creditors in payment of debt;

(3) Consignment of goods if actual sale is not made

within sixty (60) days following the date such goods
were consigned; and

(4) Retirement from or cessation of business, with

respect to inventories of taxable goods existing as of
such retirement or cessation.
SEC. 108. Value-added Tax on Sale of Services  (9) Services rendered to offshore gaming licensees
B) Transactions Subject to Zero Percent (0%) Rate -
The following services performed in the Philippines by
VAT- registered persons shall be subject to zero percent
(0%) rate.
(1) Processing, manufacturing or repacking goods for
other persons doing business outside the Philippines
which goods are subsequently exported, where the
services are paid for in acceptable foreign currency and
accounted for in accordance with the rules and
regulations of the Bangko Sentral ng Pilipinas (BSP);
(2) Services other than those mentioned in the preceding
paragraph, rendered to a person engaged in business
conducted outside the Philippines or to a nonresident
person not engaged in business who is outside the
Philippines when the services are performed, the
consideration for which is paid for in acceptable foreign
currency and accounted for in accordance with the rules
and regulations of the Bangko Sentral ng Pilipinas
(BSP);
(3) Services rendered to persons or entities whose
exemption under special laws or international
agreements to which the Philippines is a signatory
effectively subjects the supply of such services to zero
percent (0%) rate;
subject to gaming tax under Section 125-A of this Code
by service providers, including accredited service
providers as defined in Section 27 (G) of this Code.[20]
Provided, that subparagraphs (1) and (5) hereof shall be
subject to the twelve percent (12%) value-added tax
and no longer be considered export sales subject to zero
percent (0%) VAT rate upon satisfaction of the
following conditions:
(1) The successful establishment and
implementation of an enhanced VAT refund
system that grants refunds of creditable input tax
within ninety (90) days from the filing of the
VAT refund application with the
Bureau: Provided, That, to determine the
effectivity of item no. 1, all applications filed
from January 1, 2018 shall be processed and
must be decided within ninety (90) days from
the filing of the VAT refund application; and
(2) All pending VAT refund claims as of
December 21, 2017 shall be fully paid in cash by
December 31, 2019.

(4) Services rendered to persons engaged in international

shipping or international air transport operations,
including leases of property for use thereof: Provided,
That these services shall be exclusive for international
shipping or air transport operations; [92]

(5) Services performed by subcontractors and/or

contractors in processing, converting, or manufacturing
goods for an enterprise whose export sales exceed
seventy percent (70%) of total annual production;

(6) Transport of passengers and cargo by domestic [92] air

or sea vessels from the Philippines to a foreign country;
and

(7) Sale of power or fuel generated through renewable

sources of energy such as, but not limited to, biomass,
solar, wind, hydropower, geothermal, ocean energy, and
other emerging energy sources using technologies such
as fuel cells and hydrogen fuels.

(8) VETOED BY THE PRESIDENT [93]

OTHER PERCENTAGE TAXES In computing the percentage tax provided in this Section,
the following shall be considered the minimum quarterly
SEC. 116. Tax on Persons Exempt from Value-Added gross receipts in each particular case:
Tax (VAT). [115]- Any person whose sales or receipts are
exempt under Section 109(CC) [116] of this Code from the Jeepney for hire –
payment of value-added tax and who is not a VAT-
registered person shall pay a tax equivalent to three 1. Manila and other cities P 2,400
percent (3%) of his gross quarterly sales or receipts: 2. Provincial 1,200
Provided, That cooperatives, [117] shall be exempt from
the three percent (3%) gross receipts tax herein imposed: Public utility bus –
Provided, further, That effective July 1, 2020 until June
30, 2023, the rate shall be one percent (1%). [118] Not exceeding 30 passengers P 3,600
Exceeding 30 but not exceeding 50 passengers 6,000
(NOTE: The amendment introduced by the TRAIN Law Exceeding 50 passengers 7,200
was vetoed by the President. The veto message reads:
Taxis -
C. Exemptions from percentage tax of gross
sales/receipts not exceeding five hundred thousand 1. Manila and other cities P 3,600
pesos (P500,000) 2. Provincial 2,400

I am constrained to veto the provision which provides Car for hire (with chauffer) P 3,000
for the above under line 12 of Sec. 38 in the enrolled
bill, to wit: Car for hire (without chauffer) 1,800
“And Beginning January 1, 2019, Self-Employed and
Professionals With Total Annual Gross Sales And/Or
Gross Receipts Not exceeding Five Hundred Thousand
SEC. 118 Percentage Tax on International
Pesos (P500,000)
Carriers. – [120]
The Proposed exemption from percentage tax will result
(A) International air carriers doing; business in the
in unnecessary erosion of revenues and would lead to
Philippines on their gross receipts derived from transport
abuse and leakages. The subject taxpayers under this
of cargo from the Philippines to another country shall
provision are already exempted from the VAT, thus, the
pay a tax of three percent (3%) of their quarterly gross
lower three percent percentage tax on gross sales or
receipts.
gross receipts is considered as their fair share in
contributing to the revenue base of the country.)
(B) International shipping carriers doing business in the
Philippines on their gross receipts derived from transport
of cargo from the Philippines to another country shall
pay a tax equivalent to three percent (3%) of their
SEC. 117. Percentage Tax on Domestic Carriers and quarterly gross receipts.
Keepers of Garages. - Cars for rent or hire driven by the
lessee, transportation contractors, including persons who
transport passengers for hire, and other domestic carriers
by land, [119] for the transport of passengers [except
owners of bancas] and owners of animal-drawn two SEC. 119. Tax on Franchises. - Any provision of
wheeled vehicle), and keepers of garages shall pay a tax general or special law to the contrary notwithstanding,
equivalent to three percent (3%) of their quarterly gross there shall be levied, assessed and collected in respect to
receipts. all franchises on radio and/or television broadcasting
companies whose annual gross receipts of the preceding
year do not exceed Ten million pesos (P10,000.00),
The gross receipts of common carriers derived from their
subject to Section 236 of this Code, a tax of three
incoming and outgoing freight shall not be subjected to
percent (3%) and on gas and water utilities, a tax of two
the local taxes imposed under Republic Act No. 7160,
percent (2%) on the gross receipts derived from the
otherwise known as the Local Government Code of
business covered by the law granting the franchise:
1991.
Provided, however, That radio and television
broadcasting companies referred to in this Section shall
have an option to be registered as a value-added taxpayer
and pay the tax due thereon: Provided, further, That once
the option is exercised, said option shall not be
irrevocable. [119]
The grantee shall file the return with, and pay the tax due
thereon to the Commissioner or his duly authorized
representative, in accordance with the provisions of
Section 128 of this Code, and the return shall be subject
to audit by the Bureau of Internal Revenue, any
provision of any existing law to the contrary
notwithstanding.
SEC. 120. Tax on Overseas Dispatch, Message or
Conversation Originating from the Philippines. -
(A) Persons Liable. - There shall be collected upon
every overseas dispatch, message or conversation
transmitted from the Philippines by telephone, telegraph,
telewriter exchange, wireless and other communication
equipment service, a tax of ten percent (10%) on the
amount paid for such services. The tax imposed in this
Section shall be payable by the person paying for the
services rendered and shall be paid to the person
rendering the services who is required to collect and pay
the tax within twenty (20) days after the end of each
quarter.
(B) Exemptions. - The tax imposed by this Section shall
not apply to:
(1) Government. - Amounts paid for messages
transmitted by the Government of the Republic of the
Philippines or any of its political subdivisions or
instrumentalities;
(2) Diplomatic Services. - Amounts paid for messages
transmitted by any embassy and consular offices of a
foreign government;
(3) International Organizations. - Amounts paid for
messages transmitted by a public international
organization or any of its agencies based in the
Philippines enjoying privileges, exemptions and
immunities which the Government of the Philippines is
committed to recognize pursuant to an international
agreement; and
(4) News Services. - Amounts paid for messages from
any newspaper, press association, radio or television
newspaper, broadcasting agency, or newstickers
services, to any other newspaper, press association, radio
or television newspaper broadcasting agency, or
newsticker service or to a bona fide correspondent,
which messages deal exclusively with the collection of
news items for, or the dissemination of news item
through, public press, radio or television broadcasting or
a newsticker service furnishing a general news service
similar to that of the public press.
SEC. 121. Tax on Banks and Non-Bank Financial
Intermediaries Performing Quasi- Banking
Functions. - There shall be collected a tax on a gross
receipt derived from sources within the Philippines by
all banks and non-bank financial intermediaries in
accordance with the following schedule:
(a) On interest, commissions and discounts from lending
activities as well as income from financial leasing, on
the basis of remaining maturities of instruments from
which such receipts are derived:
Maturity period is five years or less            5%
Maturity period is more than five years      1% 
(b) On dividends and equity shares and net income of
subsidiaries 0%
(c) On royalties, rentals of property, real or personal,
profits, from exchange and all other items treated as
gross income under Section 32 of this Code 7%
(d) On net trading gains within the taxable year on
foreign currency, debt securities, derivatives, and other
similar financial instruments. 7% 
Provided, however, That in case the maturity period
referred to in paragraph (a) is shortened thru pre-
termination, then the maturity period shall be reckoned
to end as of the date of pre-termination for purposes of
classifying the transaction and the correct rate of tax
shall be applied accordingly.
Provided, finally, That the generally accepted accounting
principles as may be prescribed by the Bangko Sentral
ng Pilipinas for the bank or non0bank financial
intermediary performing quasi-banking functions shall
likewise be the basis for the calculation of gross
receipts. [121]
Nothing in this Code shall preclude the Commissioner
from imposing the same tax herein provided on persons
performing similar banking activities.

SEC. 122. Tax on Other Non-Bank Financial
Intermediaries. [122]- There shall be collected a tax of
five percent (5%) on the gross receipts derived by other
non-bank financial intermediaries doing business in the
Philippines, from interests, commissions, discounts and
all other items treated as gross income under this code.:
Provided, That interests, commissions and discounts
from lending activities, as well as income from financial
leasing, shall be taxed on the basis of the remaining
maturities of the instruments from which such receipts
are derived, in accordance with the following schedule:
Maturity period is five years or less           5%
Maturity period is more than five years     1%
Provided, however, That in case the maturity period is
shortened thru pre-termination, then the maturity period
shall be reckoned to end as of the date of pre-termination
for purposes of classifying the transaction and the
correct rate of tax shall be applied accordingly.
Provided, finally, That the generally accepted accounting
principles as may be prescribed by the Securities and
Exchange Commission for other non-bank financial
intermediaries shall likewise be the basis for the
calculation of gross receipts. [123]
Nothing in this Code shall preclude the Commissioner
from imposing the same tax herein provided on persons
performing similar financing activities.
SEC. 123. Tax on Life Insurance Premiums. - There
shall be collected from every person, company or
corporation (except purely cooperative companies or
associations) doing life insurance business of any sort in
the Philippines a tax of two percent (2%) [124] of the total
premium collected, whether such premiums are paid in
money, notes, credits or any substitute for money; but
premiums refunded within six (6) months after payment
on account of rejection of risk or returned for other
reason to a person insured shall not be included in the
taxable receipts; nor shall any tax be paid upon
reinsurance by a company that has already paid the tax;
nor upon doing business outside the Philippines on
account of any life insurance of the insured who is a
nonresident, if any tax on such premium is imposed by
the foreign country where the branch is established nor
upon premiums collected or received on account of any
reinsurance , if the insured, in case of personal
insurance, resides outside the Philippines, if any tax on
such premiums is imposed by the foreign country where
the original insurance has been issued or perfected; nor
upon that portion of the premiums collected or received
by the insurance companies on variable contracts (as
defined in Section 232(2) of Presidential Decree No.
612), in excess of the amounts necessary to insure the
lives of the variable contract workers.
‘Cooperative companies or associations’ are such as are
conducted by the members thereof with the money
collected from among themselves and solely for their
own protection and not for profit.
SEC. 124. Tax on Agents of Foreign Insurance
Companies. - Every fire, marine or miscellaneous
insurance agent authorized under the Insurance Code to
procure policies of insurance as he may have previously
been legally authorized to transact on risks located in the
Philippines for companies not authorized to transact
business in the Philippines shall pay a tax equal to twice
the tax imposed in Section 123: Provided, That the
provision of this Section shall not apply to reinsurance:
Provided, however, That the provisions of this Section
shall not affect the right of an owner of property to apply
for and obtain for himself policies in foreign companies
in cases where said owner does not make use of the
services of any agent, company or corporation residing
or doing business in the Philippines. In all cases where
owners of property obtain insurance directly with foreign
companies, it shall be the duty of said owners to report
to the Insurance Commissioner and to the Commissioner
each case where insurance has been so effected, and
shall pay the tax of five percent (5%) on premiums paid,
in the manner required by Section 123.
SEC. 125. Amusement Taxes. - There shall be collected
from the proprietor, lessee or operator of cockpits,
cabarets, night or day clubs, boxing exhibitions,
professional basketball games, Jai-Alai and racetracks, a
tax equivalent to:
(a) Eighteen percent (18%) in the case of cockpits;
(b) Eighteen percent (18%) in the case of cabarets, night
or day clubs;
(c) Ten percent (10%) in the case of boxing exhibitions:
Provided, however, That boxing exhibitions wherein
World or Oriental Championships in any division is at
stake shall be exempt from amusement tax: Provided,
further, That at least one of the contenders for World or
Oriental Championship is a citizen[s] of the Philippines
and said exhibitions are promoted by a citizen/s of the
Philippines or by a corporation or association at least
sixty percent (60%) of the capital of which is owned by
such citizens;
(d) Fifteen percent (15%) in the case of professional
basketball games as envisioned in Presidential Decree
No. 871: Provided, however, That the tax herein shall be
in lieu of all other percentage taxes of whatever nature
and description; and
(e) Thirty percent (30%) in the case of Jai-Alai and
racetracks - of their gross receipts, irrespective, of
whether or not any amount is charged for admission.
For the purpose of the amusement tax, the term ‘gross
receipts’ embraces all the receipts of the proprietor,
lessee or operator of the amusement place. Said gross
receipts also include income from television, radio and
motion picture rights, if any. A person or entity or
association conducting any activity subject to the tax
herein imposed shall be similarly liable for said tax with
respect to such portion of the receipts derived by him or
it.
The taxes imposed herein shall be payable at the end of
each quarter and it shall be the duty of the proprietor,
lessee or operator concerned, as well as any party liable,
within twenty (20) days after the end of each quarter, to
make a true and complete return of the amount of the
gross receipts derived during the preceding quarter and
pay the tax due thereon.
SECTION 125-A Gaming Tax on Services Rendered
by Offshore Gaming Licensees. - Any provision of
existing laws, rules or regulations to the contrary
notwithstanding, the entire gross gaming revenue or
receipts or the agreed predetermined minimum monthly
revenue or receipts from gaming, whichever is higher,
shall be levied, assessed, and collected a gaming tax
equivalent to (5%), in lieu of all other direct and indirect
internal revenue taxes and local taxes, with respect to
gaming income: Provided, That the gaming tax shall be
directly remitted to the Bureau of Internal Revenue not
later than the 20th day following the end of each month:
Provided, further, That the Philippine Amusement and
Gaming Corporation or any special economic zone
authority or tourism zone authority or freeport authority
may impose regulatory fees on offshore gaming
licensees which shall not cumulatively exceed two
percent (2%) of the gross gaming revenue or receipts
derived from gaming operations and similar related
activities of all offshore gaming licensees or a
predetermined minimum guaranteed fee, whichever is
higher: Provided, furthermore, That for purposes of this
Section, gross gaming revenue or receipts shall mean
gross wages less payouts: Provided, finally, That the
taking of wagers made in the Philippines and the grave
failure to cooperate with the third-party auditor shall
result in the revocation of the license of the offshore
gaming licensee.
“The Philippine Amusement and Gaming Corporation or
any special economic zone authority or tourism zone
authority or freeport authority shall engage the services
of a third-party audit platform that would determine the
gross gaming revenues or receipts of offshore gaming
licensees. To ensure that the proper taxes and regulatory
fees are levied, periodic reports about the results of the
operation showing, among others, the gross gaming
revenue or receipts of each offshore gaming licensee
shall be submitted to the Bureau of Internal Revenue by
the Philippine Amusement and Gaming Corporation or
any special economic zone authority or tourism zone
authority or freeport authority as certified by their third-
party auditor: Provided: That the third-party auditor shall
be independent, reputable, internationally-known, and
duly accredited as such by an accreditor similar agency
recognized by industry experts: Provided, finally, That
nothing herein shall prevent the Bureau of Internal
Revenue and the Commission on Audit from
undertaking a post-audit or independent verification of
the gross gaming revenues determined by the third-party
auditor.  [20]
SEC. 126. Tax on Winnings. - Every person who wins
in horse races shall pay a tax equivalent to ten percent
(10%) of his winnings or 'dividends', the tax to be based
on the actual amount paid to him for every winning
ticket after deducting the cost of the ticket: Provided,
That in the case of winnings from
double, forecast/quinella and trifecta bets, the tax shall
be four percent (4%). In the case of owners of winning
race horses, the tax shall be ten percent (10%) of the
prizes.
The tax herein prescribed shall be deducted from the
'dividends' corresponding to each winning ticket or the
'prize' of each winning race horse owner and withheld by
the operator, manager or person in charge of the horse
races before paying the dividends or prizes to the
persons entitled thereto.
The operator, manager or person in charge of horse races
shall, within twenty (20) days from the date the tax was
deducted and withheld in accordance with the second
paragraph hereof, file a true and correct return with the
Commissioner in the manner or form to be prescribed by
the Secretary of Finance, and pay within the same period
the total amount of tax so deducted and withheld.
SEC. 127. Tax on Sale, Barter or Exchange of Shares
of Stock Listed and Traded through the Local Stock
Exchange or through Initial Public Offering. -

(A) Tax on Sale, Barter or Exchange of Shares of

Stock Listed and Traded through the Local Stock
Exchange. [4] - There shall be levied, assessed and
collected on every sale, barter, exchange, or other
disposition of shares of stock listed and traded through
the local stock exchange other than the sale by a dealer
in securities, a tax at the rate of six-tenths of one percent
(6/10 of 1%) [125] of the gross selling price or gross value
in money of the shares of stock sold, bartered,
exchanged or otherwise disposed which shall be paid by
the seller or transferor.